Rating agency Fitch said it affirmed China’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with a Stable Outlook. It said the ratings are “supported by the country’s robust external finances, a track record of strong macroeconomic performance and size as the world’s second-largest economy”. But the ratings are “primarily constrained by large structural vulnerabilities in the financial sector, relatively lower per capita income, and weaker government metrics than those of ‘A’ peers”.
Fitch also said China’s economy is “now staging a remarkable recovery”. It forecasts real GDP growth of 2.7% in 2020, revised up by previous estimate of 1.2%. It’s baseline assumes growth will temporarily accelerate to 7.5% in 2020, the slow back to estimated trend rate of 5.5% in 2022.
Fitch also noted the the sharp escalation of geopolitical tensions between China and “a number of major economies”, “across a spectrum of issues”. The tensions “will persist” but they have not had an impact of credit fundamentals in the short term.
